Supply chain emissions assessment

Dr Graham Sinden

Food & Agriculture Organisation

Rome, 28 March 2011

This presentation should be used for your information only, and you are not permitted to reproduce it for dissemination to any third party. Whilst reasonable steps have been taken to ensure that the information contained within this presentation is correct, the

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Agenda

Setting the scene – international carbon flows

Sector emissions and trade – cotton

Product carbon footprinting

Footprinting and food - implementation

Challenges and next steps

Top 10 regional flows of CO2 embedded in goods and commodities

Note: Rest of Asia excludes China, Japan and India

Data includes flow of Scope 1-3 (direct, indirect and upstream) emissions arising in region of export that are embodied in trade flows to the region of import

Source: Carbon Trust Analysis; CICERO / SEI / CMU GTAP7 EEBT Model

Total Flows (GtCO2)

0.8

0.6

4.6

0.4

2.4

2.2

2.0

0.2

1.8

1.6

1.4

1.2

1.0

0.0

1. China to North America

2. China to Europe

3. China to Rest of Asia

4. Russia to Europe

5. Rest of Asia to Europe

6. North America to Europe

7. China to Japan

8. Africa to Europe

9. Rest of Asiato North America

10. Europe to North America

Other

9%

8%

7%

6%

5%

4%

4%

4%

4%

3%

47%

8

1

2

3

4

5

6

7

9

10

2004 Data

A consumption perspective alters the distribution of emissions between countries

120%

-60%

-40%

-20%

60%

40%

0%

SouthAfrica

Ukraine

ChinaRussiaCzech

Republic

20%

Poland

JapanItaly

GermanySpain

UK

USA

80%

Australia

CanadaBrazil

India

Rest of West Asia

France

EU

Other Annex 11

Non-Annex 11

Percen

tag

e c

han

ge i

n t

errit

oria

l em

issio

ns t

o r

efl

ect

imp

act

of

co

nsu

mp

tio

n o

f C

O2

2004 territorial CO2 emissions (27Gt)

1. Annex 1 to UNFCCC

Note 1: Includes CO2 emissions from production, process, transport and household sources only (27Gt in 2004); excludes non-CO2 emissions, and emissions due to land-use-change

Note 2: Based on an MRIO (multi region input/output) model allocating emissions to regions of consumption

Source: Carbon Trust Analysis; CICERO / SEI / CMU GTAP7 MRIO Model (2004)

Hong Kong

Sweden

2004 Data

Agenda

Setting the scene – international carbon flows

Sector emissions and trade – cotton

Product carbon footprinting

Footprinting and food - implementation

Challenges and next steps

Top 10 regional flows of emissions embodied in clothing

80

70

60

50

40

30

20

180

170

130

120

110

100

10

0

1. China to Europe

2. China to Japan

3. China to N America

4. Rest of Asiato N America

5. China to Rest of Asia

6. Asia to Europe

Total Flows (MtCO2)

8. India to Europe

9. Africa to Europe

10. Asia to Japan

Other

14%

13%

7. Europe to N America

10%

8%

7%

2%

29%

90

11%

178Mt CO2

5

8

6

10

3

4

1

7

92

Note: Excludes emissions associated with consumption in the same region as production.

Source: Carbon Trust Analysis; CICERO / SEI / CMU GTAP7 MRIO Model

Greenhouse gas emissions from cotton lint production by country

Ton CO2eper ton lint

Soil emissions are NOx emissions, principally from fertiliser application; Emissions from fertilisers and pesticides are from production.Source: Peter Grace (2009), Queensland University of Technology

Fertiliser production

Soil emissions

Pesticide production

Mechanical processes (fuel)

Ginning (electricity)

Other

Australia

3%

41%

10%

44%

23%

Brazil

7%

9%

3%

7%

24%

USA

9%

10%4%

34%

20%

15%

China

22%11%

11%

17%

15%4%

-62%

18%

48%

42%

9%

14%

4.4

India

6.4

7.0

9.6

11.7

5%

14%

6%

Flow of emissions in the Chinese textile sector to UK clothing

HK

Sri Lanka

Romania

Myanmar

Bangladesh

Malaysia

Cambodia

Turkey

Apparel Apparel

TextilesTextiles

Source: Carbon Trust Analysis; CICERO / SEI / CMU GTAP7 SPA Model

Agenda

Setting the scene – international carbon flows

Sector emissions and trade – cotton

Product carbon footprinting

Footprinting and food - implementation

Challenges and next steps

PAS 2050

Specification for the assessment of the life cycle

greenhouse gas emissions of goods and services

Published in October 2008, PAS 2050 provides an agreed method of assessing product GHG emissions

– Fifteen month process: included Steering Group, expert workgroups & consultation

– Builds on existing LCA standards, together with IPCC, etc.

– Has been downloaded in over 100 countries, over 25,000 times

In 2009/10, the Carbon Trust is sponsored the UK Accreditation Service to develop an accreditation programme accreditation for PAS 2050

– Five certification bodies accredited to verify PAS 2050 results

– Only carbon footprinting method in the world to offer independent 3rd party certification

PAS 2050 is currently being reviewed; new version expected by summer 2011

– Feedback to-date suggests that the review will refine rather than re-write PAS 2050

– Carbon Trust participating in the Steering Group

– Harmonisation between WRI, ISO & PAS initiatives is being pursued

Standards and supporting information

PAS 2050: Product carbon

footprint measurement standard

Carbon Trust Code of Good

Practice for Product GHG

Emission and Reduction Claims:

Guidance for communicating

carbon footprint results, and for

setting and assessing GHG

reductions over time

Business Opportunity: including

six case studies (incl. potatoes,

orange juice, crisps, smoothies,

cotton clothing).

PAS Guide: Implementation of

PAS 2050, written for non-

experts

Agenda

Setting the scene – international carbon flows

Sector emissions and trade – cotton

Product carbon footprinting

Footprinting and food – implementation

Challenges and next steps

Footprinting and certification

The Carbon Trust Footprinting Company is a programme operator, offering footprinting and communication (including labelling) services

– Adopted PAS 2050 as the footprinting method to be followed

– Footprinted over 5,000 products (annual UK sales over £3bn/year)

– The Carbon Reduction Label can be found in over 80% of UK homes

The Carbon Trust Certification Company is a UKAS accredited certification body

– Provides independent, third party verification of PAS 2050 footprints

– Certification used for both internal assessment, and for external communication

– CT Certification Company competes against other accredited certifiers to provide verification of carbon footprints

FootprintExpert™ is the integrated set of PAS 2050-compliant methods and models that is licensed for use by third parties carrying out product footprinting

– Ensures consistency of results for the programme operator

– Lowers costs by providing established tools and models

A range of businesses have developed comparable footprints for foods

15

Emissions assessment and supply chain carbon footprinting

Innocent Smoothies

Harmonised supply chain carbon footprinting approaches will support effective decision-making regarding emissions

assessment and reduction.

Implementing product carbon footprinting for food

Carbon footprinting for foods has been done on both a cradle-to-gate basis (e.g. British Sugar) and a cradle-to-grave basis

– Cradle-to-gate enables the flow of consistent footprint information in the supply chain

– Cradle to grave supports decision-making, and is the basis for (optional) communication activities

Food supply chains combine some complex issues in product carbon footprinting. To implement our carbon footprinting activities, the Carbon Trust has already established models to address a range of complex issues

– Non-CO2 emissions

– E.g. Fertiliser use modelling of the non-CO2 emissions in food supply chains

– Co-product allocation

– Agricultural supply chains often need to address co-product allocation, both between foods (e.g. dairy & beef) and other products (e.g. grain & energy)

– Use phase & end-of-life

– Storage, treatment, utilisation and end-of-life can make a material difference to the cradle-to-grave footprint of food products

– Energy and waste

– Complexity and consistency addressed in models and sector guidance

Agenda

Setting the scene – international carbon flows

Sector emissions and trade – cotton

Product carbon footprinting

Footprinting and food - implementation

Challenges and next steps

Sector requirements: consistency and lower costs

Current focus is on standards (e.g. ISO, WRI, PAS); however, sector requirements will be required to drive consistency and lower costs

– Advantages

– Ensures that unique features of each sector can be addressed

– Lowers costs by standardising methods across the supply chain

– Improves consistency by ensuring common approaches across different sectors

– Challenges

– Who will meet the costs? (Development & maintenance takes resources)

– How to encourage participation? (Competing requirements undermines benefits)

Experience to date

– Carbon Trust has developed supplementary guidance that is consistent with PAS 2050

– Additional methods and tools/models/calculators

– Collaboration with industry sectors such as dairy

– World Resources Institute and Carbon Trust currently collaborating to develop sector requirements for the international ICT sector

– Engagement with industry will (hopefully) promote an agreed approach

(Some) Key issues in food and agriculture supply chain footprinting

Land use change

– In some circumstances, LUC emissions dominate the footprint of foods

– Simplification and consistency will facilitate application of footprinting

– WRI and CT have discussed the development of a global LUC model

– Accessible, free LUC emissions data

– Consistent approach; compatible with current standards

Biogenic carbon flows

– The sequestration and storage of atmospheric carbon in agriculture/food systems poses unique challenges for the sector

– Addressing these issues may require support (models) or simplification

Modular approaches

– Many processes in food supply chains are common across different sectors

– E.g. refrigeration, transport, waste

– Common approaches between sectors will

– simplify and lower the costs of implementation,

– improve comparability between product footprints

Summary

It is the emissions arising from consumption, not production, that need to be addressed

– Current international approaches may mislead, and even exacerbate, GHG emissions

– Product carbon footprinting takes a consumption view of emissions production

A consistent method for GHG assessment is required if we value

– Minimising costs for business

– Maximising benefit for business and consumers

There is a need for harmonisation between different initiatives

– Standards already exist, and further guidance is being developed

– Consistent assessment methods have already been applied across countries

– The opportunity exists to use current activities to inform future developments

Additional sector guidance will lower costs and improve comparability

– Complex issues in the food sector can be addressed through sector guidance or requirements

– Common approaches could be adopted for common processes within different product groups and sectors

Further information:

Dr Graham SindenStrategy Manager

graham.sinden@carbontrust.co.uk

© The Carbon Trust, 2009All rights reserved

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Backup

Per person clothing consumption emissions by region

180

100

260

80

240

Ø 5160

220

40

120

0

6.56.05.55.00.5 4.54.03.53.02.52.01.51.00.0

IndiaAfrica

China

200

20

South America

Asia

Russian Federation

Europe

Oceania

North America

Japan280

160

140

Emissions per capita (kgCO2 - Consumption)

Population (billions)

Em

issio

ns p

er p

erso

n (

kg

CO

2 p

er y

ear)

Source: Carbon Trust Analysis; CICERO / SEI / CMU GTAP7 MRIO Model

Global average

Impact of a consumption based view on clothing emissions by country

300%

50%

100%

0%

Rest ofWestern Asia

Former Soviet Union

IndonesiaIndia

ChinaTaiwan

Greece

USA

-50%

France

Italy

Japan

HongKong

Spain

Germany150%

200%

250%

-100%

350%

UK

EUNon-Annex 1

Other Annex 1

Perc

enta

ge c

hange in c

ountr

y t

err

itori

al pro

duction

em

issio

ns t

o r

eflect

impact

of

final consum

ption o

f CO

2

Production emissions – MtCO2Note 1: Top 50 clothing producing countries (96% of emissions from global clothing production)

Note: [Includes direct emissions only] [Clarify this statement]

Source: Carbon Trust Analysis; CICERO / SEI / CMU GTAP7 MRIO Model

2004 Data

On-farm & ginning emissions for cotton production

10%

12%

20%

15%

22%

5%

10%

18%

23%

14%

25%

6.4

17%

15%

9%

14%

40%

11.7

9%

9.6

5%

5%

11%

7.0

Brazil Australia

Ginning

5%

Soil Emissions

Pesticides

N Fertliser

7%

9%

11%

24%

39%

7%

11%

Other Fertilisers

Mechanical Processes

Other

Non-MechanicalProcesses

USAIndia China

4.4

22%

31%

18%

Ton CO2-eper ton lint

Source: Peter Grace, Queensland University of Technology

PepsiCo and Walkers Product Footprinting & Labeling ProjectProducts Analyzed:

Walkers Crisps (Potato Chips) and Tropicana Orange Juice

Plans to analyze other brands (Quaker)

Key Outcomes for Walkers:

Product labeling exercise helped Walkers and suppliers

identify ways to reduce their carbon footprint – and achieve

operational efficiencies along the way.

Walkers cut carbon footprint of potato crisps by 7% which

resulted in savings of $600K

Labeling has had positive consumer impact: 10% increase

in positive reaction to label; 44% of consumers reacted

more positively to the company due to label.

Walkers’ Carbon Results & Opportunities Identified:

Majority of carbon footprint outside of operational control

(in raw materials production).

― Led Walkers to work across supply chain with suppliers to

reduce footprint.

Focused reduction efforts on manufacturing.

― Reduced energy use per kg chips by 33% from 2000-2007.

As an early adopter, became first company to carry Carbon

Reduction Label in 2007.

Continental Clothing Product Footprinting & Labeling Project

Products Analyzed:

“Earth Positive” Clothing Line

Key Outcomes for Continental:

Carbon label adds credibility to company’s existing

sustainability efforts.

Label gives certified footprint up to point of delivery -

makes it easier for customers to conduct their own

labeling efforts for finished products.

As first B2B company to pursue product labeling, have

first mover advantage in market.

Carbon Results and Opportunities Identified:

Cotton farming contributed to largest carbon impact across

the product life cycle.

Using renewable energy in farming and spinning reduced

CO2 emissions by 90%.

Identified carbon reduction strategies for processes within

spinning, water treatment, dyeing, and finishing, to reduce

footprint by an additional 15-20%.

On Pack

Point of

Sale

CSR Report

or Press

Website

Brochure /

Consumer

Education

External communications of carbon footprints

Emissions assessment and supply chain carbon footprinting

Emissions have the same impact on the atmosphere, irrespective of country of origin

– However, a production view of GHG emissions can be very deceptive for both net producer, and net consumer, countries

Supply chain carbon footprinting addresses this issue

– Whole of life cycle assessment

– All emissions, irrespective of

– Country of origin

– Country of use

– Country of end-of-life

Supply chains are complex, and the products arising from them are often the result of inputs from many countries.

– Supply chain carbon assessment takes a consumption view of emissions, including emissions from the whole life cycle.